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Friday, May 12, 2017

New DOJ Charging and Sentencing Recommendation Guidance (5/12/17)

AG Sessions has issued a new Memorandum, dated May 10, 2017, titled Department Charging and Sentencing Policy. The memorandum is here, and the DOJ press release is here.

The memorandum is short, so readers might want to go directly to it. My bullet points as to what is covers:

"[P]rosecutors should charge and pursue the most serious, readily provable offense." That is stated as a general rule for which exceptions may be allowed if approved.

"[P]rosecutors must disclose to the sentencing court all facts that impact the sentencing guidelines or mandatory minimum sentences, and should in all cases seek a reasonable sentence under the factors in 18 U.S.C. § 3553." Sentencing recommendations to the court within the guidelines range are appropriate, with recommendations for departures and variances requiring approvals.

He [AG Sessions] rescinded two policy memos signed by a predecessor, former Atty. Gen. Eric H. Holder Jr., that told prosecutors to be cautious in their use of methods that can produce dramatically harsher jail terms.

In a memo released Friday, Sessions instructed Justice Department lawyers to “charge and pursue the most serious, readily provable offense."

By definition, he added, the most serious offenses “carry the most substantial guidelines sentence, including mandatory minimum sentences.”

* * * *

With the rise of federal mandatory sentencing laws in the 1980s and 1990s, judges were stripped of much of their discretion on how to sentence drug users.

Decisions made by prosecutors often effectively determine how long offenders will spend in prison.

For example, if federal prosecutors include the amount of drugs in their written charges, that can trigger a mandatory minimum sentence.

They also have the discretion to file motions for so-called sentence “enhancements,” which can effectively double drug sentences for repeat offenders.

Some prosecutors use these tough tools as a hammer in plea negotiations, or to force offenders to cooperate.

Starting in 2013, Holder instructed federal prosecutors to use that power more sparingly and to reserve the toughest charges for high-level traffickers and violent criminals.

“As a nation, we are coldly efficient in our incarceration efforts,” Holder said in a speech decrying the growth in America’s prison population.

The Obama-era policies led to a sharp decline in the number of drug offenders hit with mandatory minimum sentences, from 62% in 2013 to 44% last year, according to U.S. Sentencing Commission data compiled by a sentencing reform group, Families Against Mandatory Minimums.

“Those numbers will go up when you are telling prosecutors to charge the harshest crimes they can get,” said Molly Gill, FAMM’s director of federal legislative affairs.“It’s really ironic,” she added. "Jeff Sessions touts himself as a champion of public safety, and they want to waste taxpayers’ money on people who aren’t that much of a threat.”

Gill said the crackdown ordered by Sessions and President Trump probably signals an end to efforts in Congress to reduce mandatory sentences.

“I think right now that’s probably dead,” she said.

In his memo, Sessions said prosecutors must disclose “all facts” relevant to a sentence, like drug amounts. He canceled a Holder policy that said prosecutors should not use sentencing enhancement motions to coerce guilty pleas.

Attorney General Jeff Sessions overturned the sweeping criminal charging policy of former attorney general Eric H. Holder Jr. and directed his federal prosecutors Thursday to charge defendants with the most serious, provable crimes carrying the most severe penalties.

The Holder memo, issued in August 2013, instructed his prosecutors to avoid charging certain defendants with drug offenses that would trigger long mandatory minimum sentences. Defendants who met a set of criteria such as not belonging to a large-scale drug trafficking organization, gang or cartel, qualified for lesser charges — and in turn less prison time — under Holder’s policy.

But Sessions’s new charging policy, outlined in a two-page memo and sent to more than 5,000 assistant U.S. attorneys across the country and all assistant attorneys general in Washington, orders prosecutors to “charge and purse the most serious, readily provable offense” and rescinds Holder’s policy immediately.

The Sessions memo marks the first significant criminal justice effort by the Trump administration to bring back the toughest practices of the drug war, which had fallen out of favor in recent years with a bipartisan movement to undo the damaging effects of mass incarceration.

* * * *

The new policy is expected to lead to more federal prosecutions and an increase in the federal prison population. In February, Sessions seemed to prepare for that inevitability, reversing a directive from previous deputy attorney general Sally Yates for the Justice Department to stop using private prisons to house federal inmates.

JAT Comments:

1. The perceived evils giving rise to the new guidance do not seem present in most tax crimes cases. The target of the new guidance, as much of the Trump administration commotion, is the perceived evils of the Obama Administration (that plays well with their base) and at least seem to be doing something that corrects those perceived evils. I am not sure that tax crimes charging and sentencing recommendations were within the scope of the perceived evils. But, tax crimes charging and sentencing recommendations conceivably could be affected by the new guidance.

2. For example, it is not clear that the policy would affect CES declinations where there is no tax crime prosecution. The policy seems to apply only if there are charges. It does not say that there must be charges in every case where the prosecutors believer there is a readily provable offense. For example, assume that the prosecutors think they can clearly prove tax evasion (or any other tax crime) in a case where the tax loss is $4,000 over the three years that could be charged. (In all likelihood, the IRS would not have recommended that prosecution, but imagine for a moment that it did.) Must CES approve the prosecution? That would be really dumb to waste systemic resources on the type of case. (And, would such a notion ripple back to the IRS to require CI to recommend prosecution in such cases and even require the operating divisions to refer such cases to CI?)

3. Does the policy mean that, since most tax cases really at bottom might be charged as evasion (since a tax loss -- tax evaded -- is required to obtain a sentence of incarceration), does that mean that we will see a shift in charges to tax evasion because tax evasion is more serious -- in terms of maximum sentences -- from the tax crimes in § 7206(1) (usually tax perjury or aiding and assisting) and § 7212(a) (tax obstruction)? Does that mean that, for plea purposes, the prosecutor must not bargain away the tax evasion charge for a tax perjury charge, when the sentencing calculations and likely sentencing will not be affected?

4. Remember Ty Warner? As I noted in discussing the sentence, Warner's guidelines range was 46-57 months. The Government recommended 1 year and 1 day, which I though was a strategic mistake (at least assuming it wanted some significant incarceration period). See Seventh Circuit Affirms No Incarceration Sentence for Ty Warner (Federal Tax Crimes Blog 7/10/15; 7/14/15), here. The CES policy is (DOJ Tax CTM 43.12[1] Departures and Variances from the Guidelines, here):

Tax Division attorneys may recommend, without further approval, a departure, either upward or downward, based on any of the factors listed in Section 5K2 of the guidelines. However, within the Tax Division, approval of the appropriate Section Chief is required for an attorney to seek either: (a) a downward departure under Section K1.1 for substantial assistance to authorities or (2) an upward or downward departure for any factor other than one of those set out in Section 5K2. Prior to making such a recommendation, the Tax Division attorney must consult with the local U.S. Attorney’s office to insure that the proposed departure is consistent with the policy of that office.

Normally, the government attorney in a tax case should not recommend that there be no period of incarceration. But see USAM 6-4.340.

As for variances, it is general Tax Division policy that sentences within the advisory Guidelines range adequately reflect the seriousness of the offense, promote deterrence, and reduce unwarranted sentencing disparities. Accordingly, Tax Division attorneys should seek supervisory approval before recommending either an upward or downward variance at sentencing.

Does the new guidance mean that CES will not recommend or will be less likely to recommend a downward variance in tax cases? Should CES even authorize prosecution of criminal tax cases where a significant downward variance will be recommended? What does this portend particularly in the offshore account cases where the sentencing has been lenient, often with the recommendation (tacit or express) of the prosecutors?

5. Having said all that, my suspicion is that we will not see any significant change in prosecutions attributable to the new guidance. And, in any event, the guidance may not be permanent. In the meantime, defense counsel must at least consider the potential impact of that the attitude expressed in the new guidance may affect their clients' cases at the margins.

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